1989 (9) TMI 31

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.... contemplated by section 13(4) was available to the assessee even if the income was brought to tax under section 13(2)(a) of the Income-tax Act, 1961 ?" The first question relates to the assessment year 1968-69, the previous year whereof ended on March 31, 1968. The assessee which is a charitable trust had accumulated income in the sum of Rs. 8,910. The Income-tax Officer subjected the said amount to tax on the ground that the trustees had not given a notice for accumulation as required by section 11(2) of the Income-tax Act, 1961. In the appeal filed by the assessee, it was established that the assessee had given this notice on July 17, 1969. The Appellate Assistant Commissioner, however, declined to accept the assessee's contention tha....

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....v. Shri Krishen Chand Charitable Trust [1975] 98 ITR 387, which decision was followed by the Tribunal. This view was also taken, independently, by the Madras High Court in Second ITO v. M. C. T. Trust [1976] 102 ITR 138. The Kerala High Court followed the abovementioned decisions in CIT v. Shree Padmanabhaswami Temple Trust [1979] 120 ITR 42. We are in respectful agreement with the view expressed by these High Courts and shall answer the first question in the affirmative and in favour of the assessee. The second question arises in relation to the assessment year 1971-72, the previous year whereof ended on March 31, 1971. The Income-tax Officer determined the unspent income of the trust for this year at Rs. 85,433. He found that the trust....

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....irectly or indirectly for the benefit of a person who is referred to in sub-section (3). The opening words of sub-section (2) are : "Without prejudice to the generality of the provisions of clause (c) of sub-section (1), the income or the property of the trust or institution or any part of such income or property shall, for the purposes of that clause, be deemed to have been used or applied for the benefit of a person referred to in sub-section (3)" in the circumstances then set out. Sub-section (4) of section 13 reads thus : "Notwithstanding anything contained in clause (c) of sub-section (1), in a case where the aggregate of the funds of the trust or institution invested in a concern in which any person referred to in sub-section (3) h....